Varma adopts biodiversity loss mitigation as sustainability guideline

Written by Michael Griffiths

21/12/2022

Varma has announced it is to adopt biodiversity loss mitigation as a sustainability guideline alongside climate work.

The Finnish group said that taking biodiversity into consideration will guide its environmental sustainability on an “equal footing with climate targets”.

To that end, Varma has created a biodiversity roadmap that sets a framework for its investment sustainability requirements in an effort to prevent biodiversity loss.

World leaders have recently gathered in Montreal, Canada, to attend the UN Biodiversity Conference whose objective was to decide on new international goals and metrics to protect biodiversity. These negotiations have focused on reaching a common agreement to end biodiversity loss and put nature back on a path to recovery by 2030.

Varma sustainability director, Hanna Kaskela, commented: “In the lead-up to the UN Biodiversity Conference it has become clear that we really need to step up our efforts to prevent biodiversity loss, as the depletion of biodiversity has continued.

“As a responsible investor, we cannot just sit back and wait for summit results; we must be active in creating our own targets to preserve biodiversity. As investors, we must build a world that is sustainable also for future generations.”

Going forward, Varma said it will take biodiversity into consideration in its investment portfolio, and the group has assessed the impacts and dependencies of its investments to identify their biggest biodiversity risks.

At the same time, Varma surveyed how large a share of the company’s investments are exposed to risks resulting from biodiversity loss. This survey covered the group’s direct investments in companies and private equity, loan and hedge funds, which make up 77% of the company’s entire investment portfolio.

Kaskela added: “It is important for investors to understand what kind of risks biodiversity loss can cause. If we allow the Amazon rainforest to be destroyed, for example, rainfall volumes can change as far afield as the United States.

“Taking biodiversity into consideration is risk management and it must be integrated into financial decision-making. It is not only about protecting nature but also ensuring that natural resources are used sustainably.”

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